Hero Honda Master

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Hero Honda Master

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Hero Honda Master

  1. 1. Driven By The Trust Of Our Customers
  2. 2. Problems & Issues <ul><li>Joint Venture Problems </li></ul><ul><ul><li>Honda Motor Company Ltd. announced it was setting up a subsidiary (HMSI) </li></ul></ul><ul><ul><li>The development of the CD-100 motorcycle was only successful for a very short period of time </li></ul></ul><ul><ul><li>Honda held complete responsibility for the Research & Development department for Hero Honda </li></ul></ul><ul><ul><li>Honda negotiated new ventures and partnerships with other Indian manufacturers in the automobile and power equipment industry, leaving Hero completely out </li></ul></ul>
  3. 3. Problems & Issues <ul><li>External Problems </li></ul><ul><ul><li>The Indian government starting allowing foreign companies to enter the Indian markets through joint ventures </li></ul></ul><ul><ul><li>The Indian marketplace was gaining more entrants causing rivalry in the industry to rise </li></ul></ul><ul><ul><li>Competitors such as TVS-Suzuki, Yamaha from Japan and Bajaj Auto began to introduce newer product lines </li></ul></ul>
  4. 4. Implementing Changes <ul><li>Management introduced new ideas coupled with improved terms of agreement for their joint venture </li></ul><ul><li>Two primary goals in mind </li></ul><ul><ul><li>Continuing their success </li></ul></ul><ul><ul><li>Maintaining their existing market share </li></ul></ul>
  5. 5. New Tactics <ul><li>Collaborating with Steyr Daimler Puch </li></ul><ul><li>Supplying completely knocked-down (CKD) kits </li></ul><ul><li>Establishing a more proactive marketing department </li></ul><ul><li>Expanding the distribution network </li></ul>
  6. 6. Renegotiating <ul><li>Extending the joint venture agreement </li></ul><ul><li>Bettering the terms in regards to royalties </li></ul><ul><li>Requesting more timely cooperation </li></ul><ul><li>Manufacturing the Street and Dream models </li></ul><ul><li>Increasing the quantity of components and subassemblies purchased </li></ul>
  7. 7. Recommendations <ul><li>Use company philosophy as competitive advantage </li></ul><ul><ul><li>Create a marketing campaign around the business strategy </li></ul></ul><ul><ul><ul><li>Building motorcycles for the common man </li></ul></ul></ul><ul><ul><ul><li>Reasonably priced with above average fuel economy </li></ul></ul></ul><ul><ul><ul><ul><li>Emphasize this could increase the likeliness of the bikes as being a substitute for the auto market, especially when gas prices are so high </li></ul></ul></ul></ul>
  8. 8. Recommendations <ul><li>Utilize a related diversification strategy – enter the scooter market </li></ul><ul><ul><li>Use expertise of India’s terrain and people to capture the scooter market before new sister company Honda Motor Scooters India Ltd. enters the market </li></ul></ul><ul><ul><li>Capitalize on positive and popular brand image </li></ul></ul><ul><ul><li>Share similar resources for motorcycles and scooters </li></ul></ul>
  9. 9. Recommendations <ul><li>Expand to countries that heavily utilize two-wheelers </li></ul><ul><ul><li>Popular vacation spots in Central and South America as well as the Caribbean </li></ul></ul><ul><ul><ul><li>Tourists year-round; may opt to rent motorcycles or scooters versus automobiles </li></ul></ul></ul><ul><ul><li>Could be potential for high volume/fleet sales </li></ul></ul><ul><ul><li>Examine warm tourist locations within the United States including California and Florida for possible market entry </li></ul></ul>
  10. 10. Case Update <ul><li>Hero Honda Today </li></ul><ul><ul><li>India and Hero Honda </li></ul></ul><ul><ul><ul><li>Fuel Efficient </li></ul></ul></ul><ul><ul><ul><li>Pollution Control/Quality </li></ul></ul></ul><ul><ul><li>Technology </li></ul></ul><ul><ul><ul><li>Customers, Dealers/Vendors </li></ul></ul></ul><ul><li>Fiscal Year 2003-2004 </li></ul><ul><ul><li>Market Share </li></ul></ul><ul><ul><li>Distribution & Service Network </li></ul></ul><ul><ul><li>Routes/Delivery – MapInfo </li></ul></ul>
  11. 11. Case Update <ul><li>Fiscal Year 2004-2005 </li></ul><ul><ul><li>Earnings Results </li></ul></ul><ul><ul><ul><li>Technological Support </li></ul></ul></ul>Rs 2,379.20 September 30 th , 2005 Rs 1,943.60 September 30 th , 2004
  12. 12. Case Update <ul><li>Current Models </li></ul><ul><ul><li>100 cc plus segment </li></ul></ul><ul><ul><ul><li>Super Splendor & Glamour </li></ul></ul></ul><ul><ul><li>150 cc plus segment </li></ul></ul><ul><ul><ul><li>Achiever </li></ul></ul></ul><ul><ul><li>Scooter Segment – wider customer base </li></ul></ul><ul><ul><ul><li>“ Pleasure” </li></ul></ul></ul>
  13. 13. SWOT Analysis <ul><li>Strengths </li></ul><ul><ul><li>Ability to understand customer’s needs and wants </li></ul></ul><ul><ul><li>Recognized and established brand name </li></ul></ul><ul><ul><li>Effective advertising capability </li></ul></ul><ul><li>Weaknesses </li></ul><ul><ul><li>R&D is not close to the Hero manufacturing plant </li></ul></ul><ul><ul><li>Hero is vulnerable in the joint venture because Honda Motor Company has so much power </li></ul></ul>
  14. 14. SWOT Analysis <ul><li>Opportunities </li></ul><ul><ul><li>Global expansion into the Caribbean and Central America </li></ul></ul><ul><ul><li>Expansion of target market (include women) </li></ul></ul><ul><ul><li>Become India’s leader in the scooter market </li></ul></ul><ul><li>Threats </li></ul><ul><ul><li>Honda Motorcycles and Scooters India can take away market share and cause joint venture to go sour </li></ul></ul><ul><ul><li>Bajaj Motors is a strong competitor </li></ul></ul>
  15. 15. A Bright Future? <ul><li>Yes ! </li></ul><ul><ul><li>Established name and dominant market position </li></ul></ul><ul><ul><ul><li>Strong Marketing Department </li></ul></ul></ul><ul><ul><li>Local Knowledge </li></ul></ul><ul><ul><li>Technological Advancements </li></ul></ul><ul><ul><li>Introduction of scooter </li></ul></ul><ul><ul><li>Renewal of joint venture </li></ul></ul>
  16. 16. Thank you! Questions/comments?

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